Oil rebounded as much as 0.7 per cent to top $74 today on a weaker dollar, but prices stayed close to last week's six-week lows on a combination of lacklustre economic indicators, rising risk aversion and a lack of hurricane activity in the Gulf of Mexico.
US crude for delivery in October, the front-month contract from today after September went off the board on Friday, climbed as much as 48 cents to $74.30 a barrel and was up 33 cents at $74.15 earlier this morning, while October ICE Brent gained 32 cents to $74.58.
Front-month crude ended last week at the lowest level since early July, after prices touched a Friday intraday low of $73.19. Prices have fallen more than 10 per cent from a high on August 4th of $82.97. For now, traders and analysts say, a rally may only be triggered by hurricane-related disruptions to output or refining.
Tropical Storm Danielle formed over the mid-Atlantic on Sunday and could become a hurricane by tomorrow night, the US National Hurricane Centre said, but it was headed for Bermuda, posing no threat to oil and gas infrastructure in the hydrocarbon-rich Gulf of Mexico.
Although forecasts are for the Atlantic hurricane season to be the most active in five years, no threatening storms were in sight as the period of peak activity between mid-August and mid-October kicked off. Only four storms have so far gained enough intensity to be named, versus 11 at this stage in the destructive 2005 season.
Hurricane Katrina, which in 2005 became the worst storm for the US offshore oil industry, devastated platforms, pipelines and rigs as it cut across the Gulf in the last week of August.
Reuters